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2005, 2008, or 2013? Pennsylvania PUC Opens Another Proceeding to Jumpstart Retail Natural Gas Market, Citing "Dismal" Residential Market
The Pennsylvania PUC has instituted what is essentially its third generic proceeding to examine barriers to a workably competitive retail natural gas market, after two prior efforts have failed to create meaningful opportunities for residential customers to choose an alternative gas supplier.
The PUC first tipped an intent to open yet another retail gas market investigation this spring. At that time, Matters noted that the PUC previously conducted two prior investigations into barriers in the retail natural gas market, and each of those proceedings failed to make a meaningful dent in continued barriers to workable retail gas choice.
Click here for prior story detailing fully the PUC's prior efforts, and how they fell short.
The PUC conceded yesterday in opening its third retail gas market investigation that the current retail market is "dismal."
"[T]he number of current customers purchasing gas from a competitive supplier remains dismal at less than thirteen percent on a statewide basis. This causes us great concern because we believe that there are more opportunities for customers to benefit from robust competition in the retail natural gas market," the PUC said.
"At the same time, one of the challenges for regulators is remaining current with the constant changes within the industries and markets they regulate. Given the tremendous natural gas resources that exist in the Commonwealth, there is great excitement over the potential to grow the use of natural gas. As access to this abundant resource becomes increasingly available and the necessary infrastructure is built-out, the Commission believes it is important to ensure that consumers have opportunities to realize the advantages of a robust and effective competitive natural gas industry. To that end, we believe that the time is right for the Commission to renew its inquiry and initiate a formal investigation into the current status of Pennsylvania's retail natural gas market to assess whether effective competition exists and make recommendations for improvements to ensure that a properly functioning and workable competitive retail natural gas market operates in the state," the PUC said.
The PUC said that it would follow the same process for the gas market investigation as used in the recent retail electric market investigation.
Specifically, the retail gas market investigation will proceed in two phases. The first phase will assess the status of the current retail gas market and explore what changes are needed to allow customers to best realize the benefits of choice. At the conclusion of the first phase, the Commission will initiate the second phase, headed by the Commission's Office of Competitive Market Oversight (OCMO). OCMO's charge will be to examine and address how to best resolve the issues raised and then how to implement the prudent changes identified to improve competition
The PUC started the retail market investigation by seeking comment on the following:
1. What is the current status of retail natural gas competition for customers, by class and by service territory, and for NGSs? For each such customer class and service territory, how accessible are competitive suppliers?
2. Are currently effective NGDC rates properly structured to reflect the separation between the costs of the NGDC's role as a distribution utility and its role as a Supplier of Last Resort (SOLR)?
3. Does the existing market design of NGDCs serving as the SOLR present barriers that inhibit customer choice or prevent suppliers from fully participating in the retail market?
4. Should NGDCs continue in the role of SOLR?
5. Are there enhancements and updates to the current SOLR model that would further improve the state of competition within the retail natural gas market?
a. Are there opportunities through the potential restructuring of the SOLR model and retail gas market to encourage expansion of natural gas distribution facilities into areas of the Commonwealth that do not currently have access to natural gas facilities?
b. Are there changes to the retail natural gas market that the Commission can undertake de novo through regulation or policy that would promote retail natural gas competition?
c. Are there changes to the retail natural gas market that the Commission can undertake de novo through regulation or policy that would remove barriers to retail natural gas competition?
d. What legislative changes should be made to further improve the retail natural gas market in Pennsylvania?
6. Are there outcomes from the Commission's recently completed electric RMI that would be applicable and useful to implement in the retail gas market? To the extent possible, please provide comments on the following topics:
a. Seamless Move
b. Accelerated Switching Timeframes
c. Standard Offer Program
d. Low-income customer shopping
e. Expanded Consumer Education about shopping
f. Any additional RMI initiative that would translate well to the retail natural gas market
7. To take advantage of the opportunity that is present through the Marcellus Shale resource, should NGDCs and NGSs be encouraged to explore opportunities with natural gas exploration and production companies?
8. Recognizing that the Commission withdrew the proposed rulemaking addressing NGDC business practices at Docket No. L-2009-2069117 and committed to commencing a new proposed rulemaking on these issues, please provide comments on the continued need to address standardized supplier tariffs and business practices with regard to imbalance trading, tolerance bands, cash out and penalties, nominations and capacity.
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September 13, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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